How can purchasers prepare for an upcoming off the plan settlement?

How can purchasers prepare for an upcoming off the plan settlement?
How can purchasers prepare for an upcoming off the plan settlement?

Congratulations, it's settlement day and you've just reached for a bottle of French Champagne that’s been patiently waiting on ice all day long. You gently loosen the cage, lean the bottle 45 degrees in anticipation for the cork to be set free, followed by celebrations and joy!

Wait a moment, how did this property settlement which you purchased as your dream home or calculated investment for your future come to be?

The settlement of a property is the legal process where ownership formally passes from a vendor to you as the purchaser. In the state of NSW, settlement periods are traditionally 42 days/ 6 weeks from exchanging of contracts for an established property. For an off the plan purchase, the settlement period runs parallel with the construction program, progress of the subject property, the occupational certificate being granted authorising the property to be habitable and strata plan registration with the NSW Land Registry Services. 

Most off the plan projects will commence sales prior to construction. This is regularly to achieve a set percentage of pre-sales to reach the desired sales target. Once reached, this will most often mark a significant milestone, which allows for demolition and construction works to commence. Demolition, civil works & excavation, columns, and slabs/ levels, the construction topping out (top floor reached), lock-up stage celebrates the building being weather tight and builders transitioning to internal fit-out and final completion of construction are all key industry milestones. 

Leading up to settlement, it is always very important to stay organised. Naturally, you will have your own team to assist you, and this will include your lawyer, solicitor or conveyancer; who assisted you in completing due diligence on your paperwork when you exchanged on your purchase as long as 18 months ago. Added to your team, for most purchasers will be your Bank, Lender, Mortgage Broker or Financial Institution by the way of providing finance or a loan on your purchase. Your accountant will also likely be involved at some stage as independent financial advice is always recommended.

What happens if you've just been contacted and invited to come and complete a pre-settlement property inspection? 

This is an opportunity to arrange a convenient appointment to inspect your property and to provide the property agency or developer feedback on any items you feel require extra attention or repair work. It is important to remember construction is human-made and it may be the year 2020, technology has not quite taken over. 

Naturally, items will be found and construction is still a form of art. There could be a chip on a tile, a mark on a wall, and even a squeaky hinge on your front door. Look low and look high, run your eye line along the full length of the walls, open and close cabinets and storage. Turn all lights on & off. Bring a smartphone charger and test all the power points. Write down as many items you would like to bring to their attention. 

The entire process is highly subjective, and an extra set of eyes is invaluable in completing your pre-settlement inspection. As backup, don't forget about the carpenter in the family or a close friend who's in the construction industry, or a contact who's recently been through a similar purchasing process or even work in the property industry. If you don't feel comfortable in your know-how or are overwhelmed by the thought of this inspection, there are companies that specialise in assisting with property inspections and this crucial step.

Lastly, here are some useful tips and questions to bear in mind if you were to conduct an inspection:

  • Read any communication or construction updates provided.
  • Touch base with the property agency or agent who sold the property to you. 
  • Walk or drive past every now and then to confirm progress with your own eyes.
  • As construction is nearing settlement, your legal representative will receive correspondence from the vendor’s side. 
  • Have your financial pre-approval in place.
  • Complete a pre-settlement inspection and keep records of any items, which require further attention. 
  • Pass this record to your legal representative so it can also be documented from their end.  
  • Your financial institution will likely need to complete a property valuation. 
  • The agency or agent will most likely be the point of contact for this step.
  • Are there any registration or resident register forms, which need to be filled out and returned? 
  • Are there any guidelines, by-laws, moving in procedures, waste & rubbish removal, vehicle registration forms?
  • If handed a settlement pack, warranty manuals, and any additional collateral/ paperwork. These are best kept in a safe space, should they be required in the future. 
  • Contact details for a strata manager, caretaker, concierge, building manager.

Now that you've settled all matters and you have your set of shiny keys, it's time to get back to the champagne and a toast your property milestone.

Congratulations!

Anson Kolb

Anson Kolb

Anson's a Director of 365 Property Group. 365 Property Group have been involved in project marketing many of Sydney's most iconic developments. For over 15 years Anson has worked for some of the most successful project marketing agencies in Sydney. He has gained an enviable reputation as a first-class project marketing operator. He also holds a Class 1 Real Estate Agent Licence and recently completed a Master's in Property Investment & Development at WSU.

Comments

Be the first one to comment on this article
What would you like to say about this project?